Region sees fewer foreclosures, but more may come

WASHINGTON – Once again, there are fewer foreclosed homes being sold in the D.C. region, but it’s not a sign of a strengthening market in all areas.

“Especially in Maryland we’ve been waiting for the other shoe to drop when it comes to foreclosures,” says Daren Blomquist, vice president at RealtyTrac.

New data from RealtyTrac shows foreclosure sales were down in Maryland by nearly 9 percent in the second quarter of 2012 compared to the first quarter. They were also down nearly 57 percent from a year ago in the state.

But Blomquist says while the market has improved slightly, it’s not the genesis for the drops.

“A lot of the decreases in the past year and a half are more due to procedural delays and state legislation there in Maryland that slowed things down starting back in August 2010,” says Blomquist.

The foreclosure process in Maryland can take nearly two years, which continues to stall numbers.

Blomquist says experts believe the number of foreclosures will begin to increase by the fourth quarter. He says he recently spoke with an attorney who handles foreclosure cases in Maryland, and the attorney said he’s seeing more referrals from banks to foreclose on homes.

In another sign that more foreclosures are coming, foreclosure starts – the first sign that a foreclosure is imminent – have increased for six months since November of 2011.

Foreclosure sales also are down in Virginia, but Blomquist says that reflects a healthy market. Virginia saw a nearly 52 percent decrease in foreclosure sales from a year ago.

They were down nearly 40 percent from the previous quarter.

“Many of the foreclosures there were taken care of and processed in 2008 and 2009,” says Blomquist. He doubts Virginia will see another spike in foreclosures, since numbers have been decreasing for many months.

D.C. also is experiencing decreasing foreclosure sales. Blomquist says it’s a combination of an improving market along with a long process to work through foreclosures.

D.C. saw foreclosure sales drop 47 percent from the previous quarter and 75 percent from a year ago.

Also of note, the average sale price for a foreclosed home in D.C. is $280,711, far more than the national average of $155,892.

Virginia foreclosures sold on average for $248,192. The average sale price dips to $175,389 in Maryland.